What To Expect When You Close On A Mortgage Loan

Published: December 26, 2018

Closing on a home loan can be a quick and easy process, if you're prepared. By preparing ahead of time, you'll be able to get in and breeze through the closing without any issues. If you're currently in the process of purchasing a home, here's what to expect when you close on a home loan.

What is a closing?

A closing is a meeting where the buyer and seller officially sign the papers, which means that the ownership of the property is officially transferred to the buyers.

Who attends a closing?

It depends on the state you live in. Usually, it will be the closing agent who works for the lender or the title company, an attorney, title company representative, the seller(s), the seller's real estate agent, you, and your lender.

How do you prepare for the closing?

Usually, a few days before the closing, you'll receive the closing disclosure. This is a lengthy document that outlines the terms of your loan, the closing costs, and any outstanding charges or fees. You'll sign this document, and there's a three-day waiting period before you can sign the mortgage loan documents. If you want to read the entire document, you're probably better off emailing your escrow agent and requesting a copy a week before your closing to give you ample time.

24 hours before the closing, you'll schedule a final walkthrough. You'll make sure that any repairs were made, the property is the way you expected it, and that the seller has vacated the property. If there are significant problems, you can request to delay the closing or request the seller deposit money to cover any repairs.

Another thing that should be on your to-do list before the closing is to make arrangements with all of the utility companies to transfer service to your name. Make sure that it's effective the day of your closing so that you don't have to worry about it the day of.

What do I need to bring on closing day?

When the day is finally here, you'll need to bring a few items to the closing. Don't worry, your lender will give you a checklist to ensure you have everything you need. Here's a general list for reference.

  • Photo ID
  • Outstanding documents or paperwork for the title company or mortgage loan officer
  • Certified or cashier's check made payable to the title or closing company for closing costs that aren't being deducted from the sales price

What to expect on closing day?

It's finally here! You're getting ready to become homeowners, you may be wondering what exactly happens? Usually, this is where you'll sign what feels like 1 million sheets of paper. In addition to that, you'll pay any remaining closing costs that are listed in the Closing Disclosure, the seller will sign the documents to transfer the property ownership, you'll sign documents that may include: a settlement statement that lists all costs related to the sale, a mortgage note saying your promise to repay the loan, the mortgage or deed of trust securing the mortgage note, the Truth-In-Lending Statement, any affidavits, the deed to the property, and any other documents that are required by the loan officer or title company. The title company will register the new deed in your name and you're done!

When can I move in?

It depends. If you don't have any agreement with the seller to rent the property or stay there for a period of time, you can move in right away. If you do have an agreement, you won't be able to move in until the term of that agreement is over.